Just what the title says. I get how those balance can and have ballooned….but can’t we just eliminate that and have to original amount repaid by the borrower? Ive never heard any side of the aisle mention this….so Im wondering why since it seems like a solution to some of the issues you see in this debate.

Late Edit: For the far right wing folks who think this is a bad idea…..do you prefer complete student loan forgiveness? Thats literally what is happening right now and being pushed for on a wider scale…..this is a solution that leaves both sides upset….which usually makes for a good solution. Im conservative by nature btw….so im AGAINST student loan forgiveness. Eliminating the interest screws the banks from my perspective…people still pay their due if they owe/pay the principal. Be solutions oriented instead of burrowing yourself in a hole thinking only YOU have the solutions.

[https://www.cnbc.com/2023/11/28/biden-administration-notifies-borrowers-of-student-loan-forgiveness-.html](https://www.cnbc.com/2023/11/28/biden-administration-notifies-borrowers-of-student-loan-forgiveness-.html)

by Fake_Plastic_Tree_85

19 comments

  2. The US has the worst student loan program in the world and there are a lot of aspects of it that make absolutely no sense unfortunately. High interest is just one of the many nonsensical aspects of the program the US has chosen to go with.

  3. I think “they” can do anything they want, so long as the “they” that we’re referring to is the Congress.

  4. The US has already a very bad national debt. We do need the money, interests included.

  5. Typically when lenders don’t make a return on their investments they go out of business soon

  6. Assuming they legally can, they wouldn’t because then there’s no incentive to ever pay it back. Without interest nobody who’s financially literate would ever pay back the loan except on the longest payment plan possible (with some niche exceptions of course).

    Also, federal student loans (90% of all student loans) can only “balloon” if people literally aren’t making their minimum payments on a standard repayment plan or taking a voluntary deferral and allow the interest to capitalize. If you are making your payments in full and on time your balance will only go down. That may not be the case with some of the other niche income driven plans though.

  7. Easy answer personal opinion

    With the amount of money they are printing right now they could pay off or cancel every payment of every debt. Which always goes back to money is totally made up however labor is not The reason you are in debt the reason you have to continue working is not because money matters or you get for your paycheck is because you have to work or the system falls apart and everyone stars

    As always you can print money you can’t print broccoli welcome to my TED talk

  8. Because ignoring interest is partial forgiveness.

    And by forgiveness I mean forcing innocent taxpayers to foot the bill instead.

    You accepted the loan, and the terms of the loan….its no ones responsibility to repay but yours.

    Now pay your loans.

  9. So the investor who funded these loans gets a negative return on their investment? That’s theft.

  10. I think most people forget the Mohela is a loan servicer and the money is owed to the federal government or the tax payers. They payments and interest will continue to

  11. I believe most loans are handled by a “middle ” company.

    Meaning, they need to make their cut, too.

    And due to the fact it’s a loan. Paying interest is normal. Otherwise the government would be “losing money” because they are loaning you money in today’s dollars . But you’d be paying back in future dollars…

    $1 in today’s money. Due to inflation, it decreases the dollars value in the future

  12. Because that would actually be a start to correcting the actual issues with the student loans and tuition. It’s much easier to either try to buy votes by “forgiving” loans, or to ignore it completely.

  13. Who will pay the interest on the Fed note used to provide the student loan if the student does not?

  15. Why should they?

    People should pay back their loans and pay interest. Stop asking for handouts.

  16. Have you seen the Federal debt? What could possibly go wrong?

  17. Need to get rid of the servicing companies, bring the loans back on the government’s books, hire some people to manage it and field questions from payers, have 3 repayment plans (10,15,20 years), charge 1% for overhead, keep PSLF, total forgiveness after 20 years, and limited conditions for bankruptcy. Limit amounts based on repayment ability using the average salary of graduates from a given school for that degree 5 years after graduating. Can use this to incentivize people to go into needed professions like teaching with some special incentives.

    In 2019, there was $1.4 trillion in student loans. About half of that was to current students, recent graduates in their 6 month deferment period, and people in forbearance/not paying. 1% of $700b is $7b. I work for an agency with 3k employees with a $1.5b budget. It doesn’t take 3k people to run what would essentially be a self-funded collection agency.

    Forgiving student loans outright is a great way to buy goodwill but a terrible way to correct the student loan problem. I’m more in favor of cutting interest, applying past interest to principal, and charging 1% or less going forward.

  18. I wish we could at least refinance to lower rates when they are available. Like a mortgage.

  19. I wish we could at least refinance to lower rates when they are available. Like a mortgage.

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